Rights-Based Approaches to Fishing:

Theory and experiences

A presentation at the conference

Tenure and Fishing Rights 2015

Ragnar Arnason*

Apsara Angor Hotel, Siem Reap

March 23-27 2015

Topics

I. Rights-based fishing: What do we know?

– Theory

– Experience

II. The cases presented at this conference

III. Conclusions

I.

Rights-based fishing:

What do we know?

The Common Property Problem

Universal: Holds for all resources, places and times!

Note however…

(1) If the “CP-group” is sufficiently small (< 10 members)

=> not complete waste.

(2) If the CP-group is able to establish co-ordinated use

(i.e., a management regime) => waste is reduced!

The Common Property Theorem

Valuable resources held in common tend to be overexploited and wasted

The CPP in Fisheries

In fisheries, the CPP appears as

1. Excessive fishing fleets and effort

2. Overexploited fish stocks

3. Poor profitability, low personal incomes

4. Little or no contribution to GDP

5. A threat to biological sustainability

6. A threat to economic/social sustainability

Value,

$

Biomass

Effort

Costs

Sustainablerevenues (yield)

Sustainablebiomass

OSY

CSY

The Sustainable Fisheries Model

Individual Property

Universal: Holds for all resources, places and times!

Validity is pretty obvious

– Aristotle noted this 350 B.C

– Individuals maximize their benefits; why would they not?

– Formally proved in economic theory (e.g. Welfare theorem I)

The Individual Property Theorem

Valuable resources held by single agents tend to be well used and preserved

Note however,…..

• It empowers rights holders– Allows them to retain old traditions if they want

So, individual property

• Promotes economic efficiency– Maximizes income and economic growth

• But it does not necessarily promote

(1) Equity and fairness

(2) Preservation of traditional social structures– Tends to undermine them!

The empirical evidence

• Most fisheries in the world have been and

are organized as CP-fisheries

Outcome:

overexploitation!(Exactly as predicted by theory)

The global fishery in 2004(World Bank and FAO 2009)

0.0

20.0

40.0

60.0

80.0

100.0

120.0

0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40

Fishing effort (index)

Re

ve

nu

es

an

d c

os

ts (

B.U

S$

)

Optimal

Potentialprofits

Current

Current loss

Global Fishery Waste

Sustainable global fishery:

Current (2004) and profit maximizing outcomes

Current

Optimal

Difference

(optimal –current)

Fishing effort 13.9 m. GRT 7.3 m. GRT -6.6 m. GRT

Harvest 85 m. mt 81 m. mt. -4 m. mt.

Biomass 148 m. mt 314 m. mt. +165 m.mt.

Profits -5 b. USD 44 b. USD 49 b. USD

50 b. USD Global Development Assistance in 2004

Although

global fisheries are still mostly

organized as common property ones

rights-based fisheries are becoming

more common

Key Property Rights in Fisheries

Key Property Rights in Fisheries

Sole

ownership

Territorial

user rights

TURFs

Individual

quotas

IQs/ITQs

Community

rights

Rarely

used

Mainly

sedentary

species

Very

common

Fairly

common

Good

Experience

Good Good Mixed

Individual Transferable Quotas: ITQs

• The most widely applied rights-based fisheries management system in the world

• Adopted as a major part of the FMS by at least 22 major fishing nations─ New-Zealand, Australia, USA, Canada, Greenland, Iceland, Holland,

Norway, Denmark, Sweden, Estonia, Germany, UK, Portugal, Spain, Russia, Morocco, Namibia, South Africa, Chile, Peru, Falkland

• Close to 25% of global catch is now taken under ITQs!

Outcomes of ITQs- General pattern around the world -

Economically very successful!

(1) Reduction in fishing effort (immediately)

(2) Fishing capital declines (but usually slowly)

(3) Unit price of landings quickly increases (often

greatly)

(4) Quotas become valuable (quickly!)

Outcomes of ITQs (..cont.)

Socially ?

(1) Alters structure of fishing industry/communities

– More efficient operations, techniques

– Tends to consolidate operations (fewer vessels, fishers)

(2) Creates new valuable assets – some people get rich

(3) Promotes more capitalistic culture

Biologically moderately successful

(1) Biomass recovers (slowly)

(2) Enhanced sense of resource stewardship by fishers

(3) Discarding often reduced

Good or bad?

Limitations to PRs

• In principle PRs solve the main problems of

fisheries

• In practice there are difficulties

1. PR-technology

– Can we define and enforce PRs?

– Prohibitively costly to enforce the PRs

2. Socio-politically infeasible

These difficulties apply in particular to artisanal

fisheries in less developed countries (esp. Africa & Asia)

50% of the global fishery

But note

• Common property problem within the community!

– Not a trivial problem (decision making in groups, politics,

impossibility theorems, disparage member interests etc.)

• Likelihood of success depends on

(a) the quality of community rights and

(b) decision making set-up!

For these reasons

attention has been drawn to

community fishing rights

Fishing Communities:

Design Principles: Summary(Ostrom 1990, Arnason 2005)

1. Community rights should be as high quality as possible

2. Community must be able to restrict entry

3. Community should be inclusive – i.e. include all fishers in the area

Design Principles: Summary (cont.)

4. Community should have as homogeneous membership as possible

5. Each member’s pay-off should be increasing in the aggregate pay-off

6. Fishing communities should be endowed with efficient decision-making structures

– Governance!

II.

Case Study Experiences

The case studies

1. Eight cases

2. From different parts of the world

3. However, not representative (too few & not random)

4. Have not been able to study carefully => may

have missed and misunderstood

Case studies: Summary table

Individual

rights Communal rights Results

Type Type Quality

Design

principles

Bio-

economic Social

Cambodia TURFs Med No? +/- +

Indonesia TURFs (Weak) No? (+/-) (+)

Sierra Leone TURFs Med No? ? (+)

PNA Days Days Strong (Yes) + +

Mexico Licences TURFs Weak No? -? ?

Canada ITQs +(?) (-)

Iceland ITQs + (-)

Australia IEQs +

Summary

1. Great variety of arrangements

2. Mostly weak PRs and imperfectly developed

community management frameworks

Pattern of outcomes

1. Bio-economic outcomes

– If individual rights => good

– If community rights => weak

2. Social outcomes

– If individual rights => weak

– If community rights => good

What should the Commission do?

1. Member nations decide on fisheries

management

2. Commission should:

• Encourage adoption of rights-based methods

• Offer technical and expert advice

• Offer financial support (adjustment, regional etc.) -

loans rather than grants.

• Beef up enforcement especially for landings

END